How does the umbilical cord get a  knot in it?

It happens when the baby is still small enough to move freely in the
amniotic fluid.  If baby is an acrobat, he/she may be able to actually create
a knot by swimming through a loop in the cord.  I have seen a cord with
two knots in it.  This is not usually a problem until birth, when the cord is
stretched as the baby descends down the birth canal and tightens the
knot, cutting off the blood supply.  A symptom of this could be a
decreased heart rate during labor & delivery.  Most babies born with a
knot are perfectly fine and it is a minor problem.  

What kind of prenatal vitamin should I take?

Good for you for taking your prenatals!
Your most important vitamins right now are folic acid, calcium, and iron.  
Folic acid, as you probably know, was good in those first few weeks of
pregnancy for reducing birth defects.  Iron is good throughout your
pregnancy to preven anemia.  Calcium indeed is needed to prevent your
own bone loss.  For more info, click here!

My wife has been diagnosed with having a cyst.  Should we be
worried?

It depends on the nature of the cyst.  All pregnancies are supported by a
cyst in the first weeks of pregnancy, called the corpus leutum.  This little
yellow cyst makes the progesterone necessary to sustain the pregnancy
until the placenta is developed.  Sometimes this turns into a larger,
fluid-filled cyst that will go away on it's own, after the placenta kicks in.
The doctor will inform you if this cyst is not either of these two types and if
it is worrisome.  If they just said she has a cyst, then you can congradulate
her for doing her job!
And congrats to you, Dad!
Cascade Christian Childbirth Association
    Common Questions
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